TOTAL QUALITY MANAGEMENT

Quality can be defined as “fitness for use”, “customer satisfaction”

“doing things right the first time”, or “zero defect”.
Quality is the degree to which a commodity meet the requirement of
the customer at the start of its life.
Quality of a product or service can be defined as its ability to fulfil the
need and expectation of a buyer and generate the desired level of
satisfaction through its set of features, attributes and characteristics.
The main focus of quality depend on identifying customer need
translating these into a set of measurable characteristic or attributes
which can be incorporated in a product or services. This will provide a
particular level of customer satisfaction.
A quality system is the agreed on company wide and plant wide
operating work structure for guiding the coordinated action of
people, the machine, or the information of company in the best and
most practical ways to assume customer quality satisfaction and
economical cost of quality.
We try to evaluate the quality of product or service on the basis of
the following:
 Performance (will the product do the intended job?)
 Reliability (how often the product fails?)
 Durability (how long the product last?)
 Serviceability (how easy is repair the product?)
 Aesthetics (what does the product look like?)
 Features (what does the product do?)
 Perceived quality (what is the reputation of a company or its
products?)
Quality cycle is the basic process of quality management and
described differently by different experts in this field. Quality revolves
around the customer satisfaction, whether internal or external, and
mean conformance to specification. Companies try to maintain a
consistent quality in their product and explore customer need so that
they can bring newer product which can provide greater satisfaction
to all stakeholder.
So the main task of any company is to planning, producing and
meeting the specification of good and service which can satisfy the
need of the customer. Hence, the quality cycle begin with the effort
of company to identify and understand the need of the customer.
Total quality management can be defined as the integration of all
the activities, procedure, process a company employs and follow to
generate a predetermined degree of satisfaction in the customer
internal or external.
TQM is the art of managing the whole to achieve excellence in terms
of product. TQM can be seen as a process, used to manage the
change in environment that will ensure that company reach the goal
of TCI (Total Continuous Improvement).
TQM is a management approach of an organisation centred on the
participation of all its member and aiming at long term success
through customer satisfaction and benefit to the member of
organisation and society.
Total Quality Management is a set of management practices
throughout the organisation, geared to ensure the organisation
consistently meet or exceeds customer requirement.
Total Quality management is a combination of a number of
organisation improvement technique and approach including the use
of quality circle, statistical quality control and extensive use of
employee participation.
Basic Principle of TQM:-
1. The customer makes the ultimate determination of quality.
 2. Top management must provide leadership and supply for all
quality initiative.
3. Preventing variable is the key to producing high quality.
4. Quality goal are a moving target, thereby requiring a
commitment toward continuous improvement.
5. Improving quality require the establishment of effective
metrics. We must speak with data and fact not just opinion or
got feelings.
TQM is centered at customer satisfaction. According to TQM, all the
activities of the company should be directed towards achievement of
customer satisfaction.
TQM is a top-to-bottom approach which means without the active
involvement and intention of the top management, TQM cannot be
effective in any organisation. Only through commitment of the top
management, TQM can bring out the desired result.
TQM require a suitable environment for effective working, which
includes organisation culture of free communication, flexible
organisation or organic structure of organisation, different
infrastructure, empowerment of employees and team building.
Role of leadership in TQM:
 This includes to identify and establish long term organisational
goals.
 To define a specific vision and mission of the company. This
encompasses the commitment towards quality.
 To formulate policies and procedures, in line, with the vision
and mission of the company.
Integration of all level and processes of the organisation in the
achievement of quality goal:
TQM require that each department, process and employees must
participate in the management of quality. This is everyone job and
cannot be restricted to a selected few. TQM require commitment
from all in the company and even from the stakeholder of the
company, like supplier, distributor, BODs, etc.
Participation and empowerment of people:
TQM require employee participation, since the goal of TQM can be
achieved when the employees understood the concept of quality and
its importance for success. TQM requires consistency of work which
can only be achieved when the skills are maintained with appropriate
training.
Continuous Improvement:
According to TQM, there is always scope for improvement and
quality is a never ending cycle of fulfilling the need of customer in a
better manner. Continuous improvement is a systematic and planned
activity for identifying and carrying out further improvement so that
the company can cater to changing need of customer in a better
manner.
The concept of continuous improvement is applied to all level,
process and department as the opportunities of improvement are
everywhere and improving one area will surely contribute to the
overall development of the organisation. It is a critical requirement in
all activities of the organisation for ensuring the quality of the
operation. The essence of continuous improvement is the belief in the
belief in the fact the improvement are always possible.
Fact based decision making:
TQM is based on of fact based decision making. According to this
principal every decision taken by the company should be based on
facts. Hence, it require measuring and recording all the relevant data
and information so that any decision taken should be under the
overview of the data available with us. Because of it, TQM requires
implementation of a system of gathering and recording data from
different sources.
Benefit of TQM:
 Sustainable growth of company through enhanced customer
satisfaction.
 Increased productivity through optimal utilisation of resources.
 Efficient utilisation of resource and reduction in cost of
production.
 Increased employee satisfaction.
 Safer environment.
 Reduction in waste.
 Business acclaim and corporate social responsibility.
Deming’s theory of profound knowledge:
Appreciation of a system:
According to Deming, management is system approach. A manager
should understand that an organisation is an integrated system
made up of interrelated component of people and processes with
clearly defined goals. Manager needs to understand that all people
are different and individual performance is governed largely by the
system in which he work.
The appreciation of a system involves understanding the system and
considering the fact that managing the part or component of the
system is not going to manage the whole system. Manager should
understand how interaction (i.e., feedback) between the element of a
system can result in internal restriction that force the system to
behave as a single entity that automatically seek a steady state
determining the output of the system rather than the individual
element. Thus it is the structure of the organisation rather than the
employees, alone, which hold the key to improving the quality of
output.
Theory of knowledge:
According to Deming, only having information does not mean
knowledge and knowledge depends on theory. Experience teaches
nothing. According to Deming, experience without understanding the
underlying system, is just raw data that can be misinterpreted
against a flawed theory of reality.
 The psychology of change:
According to Deming, the manager should understand the fact that
every individual is different and being a leader he should motivate
people and coordinate their effort towards achievement of
organisational goal.
 Knowledge about variation:
The goal of quality or continuous improvement is to reduce the range
of variation over time, in addition to adjusting the process level to
the desired level. Almost all variation within a process is due to
chance causes, inherent in the design of the process. According to
Deming, manager should understand that everything measured
consist of both normal variation due to the flexibility of the system
and of special causes that create defects due to random causes.
Quality involve recognising the difference to eliminate special cause
while controlling normal variation.
Deming’s PDCA cycle of quality Improvement:
The PDCA Cycle:
The concept of the PDCA Cycle was taken from the PDSA cycle,
originally developed by Walter Shewhart, the pioneering statistician
who developed statistical process control in the Bell Labouratories in
the US during the 1930s. According to Deming, PDCA cycle should be
used for continuous improvement in the various processes of the
organisation.
The PDCA cycle is a checklist of the four stages which can be applied
by any organisation for process development, or problem solving, or
continuous improvement.
Plan-Do-Check-Act:
 Plans identify the target to achieve, or objective to be fulfilled
or to find out what thing are not right, find out alternative to
rectify these and select the appropriate alternative and plan
step wise approach to achieve the determined target.
 Implement changes as designed on a step wise approach to
measure the outcomes.
 Check analyse implementation through collected data and see
whether the results are in accordance with the expected result
or not. Take feedback and also record it. Find out where we
want wrong. Find out what we have missed out. Record any
new problem identified.
 Implement, the action on a broader scale and also implement
the action being identified in the checking stage.
Deming seven deadly diseases:
1. Consistency of purpose to plan product and services that will
have a market and keep the company in business and provide
jobs.
2. Emphasis on short term profit, short term thinking, fed by fear
of unfriendly takeover and pressure from bankers and owners,
for dividend.
3. Personal review system, or evaluation of performance, merit
rating, annual review, or annual appraisal, by whatever name,
for people in management the effect of which are devastating.
Management by fear would be better, than management by
objective without a method for accomplishment in place.
4. Mobility of management job hopping.
 5. Use of visible figures only for management, with little or no
consideration of figure that are unknown or unknowable.
6. Excessive medical cost.
7. Excessive cost of warranty, fuelled by lawyer that work
contingency fees.
Juran’s Quality Trilogy:
After detailed study on various companies Juran stated that
companies have to move in a new direction for managing the quality.
He said:
 There is a crisis in quality. The most obvious outward evidence
is the loss of sales to foreign competition in quality and the
huge cost of poor quality.
 The crisis will not go away in the foreseeable future.
Competition in quality will go on and on. So will the impact of
poor quality on society. In the industrialised countries, society
lives behind productive quality dislike.
 Our traditional ways are not adequate to deal with the quality
crisis. In a sense, our adherence to those traditional ways has
helped to create the crisis.
 To deal with the crisis, these as a need for some major break
with traditional. A new course must be charted.
 Charting a new course requires that we create a universal way
of thinking about quality – a way applicable to all function and
to all level in the hierarchy, from the chief executive officer to
the worker in the office or the factory.
 Charting a new course also require extensive personal
leadership and participation by upper manager.
 An obstacle to participation by upper manager is their limited
experience and trading in managing for quality. They may have
extensive experience in management of business and finance,
but not in managing for quality.
  An essential element in meeting the quality crisis is to equip
upper manager with experience and training in how to manage
for quality, and do so, on a time scale compatible with the
prevailing sense of urgency.
 Charting a new course also require that we design a basis for
management of quality that can readily be implanted into the
company’s strategic business planning, and that has minimal
risk of rejected by the company immune system.
Dr. Juran’s trilogy defined the three management processes required
by every organisation to improve: quality control, quality
improvement and quality planning.
One-Quality Planning:
 Identify the customers-both external and internal.
 Determine customer needs.
 Develop product features that respond to customer needs.
(product include both goods and services)
 Establish quality goal that meet the need of customer and
supplier alike, and do so at a minimum combined cost.
 Develop a process that can produce the needed product
feature.
 Prove process capability – prove that the process can meet the
quality goals under operating condition.
Two-Quality Control:
 Choose control subject – what to control.
 Choose unit of measurement.
 Establish measurement.
 Establish standard of performance.
 Measure actual performance.
 Interpret the difference (actual versus standard)
 Take action on the difference.
Three-Quality Improvement:
 Prove the need for improvement.
 Identify specific project for improvement.
 Organise to guide the project.
 Organise for diagnosis – for discovery of causes.
 Diagnoses to find the causes.
 Provide remedies.
 Prove that the remedies are effective under operating
condition.
 Optimise the process.
 Prove that the process can produce the product under
operating condition with minimal inspection.
Juran’s ten steps to Quality Improvement:
 Build awareness of the need and opportunity for improvement
in the people who are involved in the work.
 Set goal for improvement in all area of work.
 Organise to reach the goals, organise and facilitate the
activities necessary for performance and realisation of set
goals.
 Provide training to improve their skill and competencies.
 Carry out project to solve problem.
 Report progress. The progress should be recorded and reviewed
in order to know that goals are achieved and improvement
plans can be drawn where shortcoming are identified.
 Give recognition. In order to motivate people and promote a
culture of quality, give recognition to the participants.
 Communicate result. Communicating the result to those who
worked for it help to boost the morale of every employee and
motivate them.
  Keep score. Management should keep the record of all the
result of the process and also be focussed towards achievement
of actual target.
 Maintain momentum by making annual improvement part of
the regular system and process of the company. Any
improvement activity should be an ongoing and continuous
activity.
The fourteen points of quality management of Crosby:
1. Management commitment:
According to Crosby quality management can only be successful with
the commitment of top management. Quality people should discuss
the need for quality improvement with management, emphasising
the need for defect prevention. Management should prepare a
quality policy that states that each individual is excepted to perform
exactly like the requirement or cause the requirement to be officially
changed to what we and the customer really need.
2. Quality improvement team:
According to Crosby teamwork is essential for quality. Company
should bring together representative of each department to form the
quality improvement team. They should be people who can speak for
their department to commits operation to action. Preferably, the
department head should participate at least in the preliminary
stages. The term member should know and understand their roles
and necessary action to take place in their department and the
company.
3. Quality measurement:
He advised that every process and standard of measurement must be
established and introduced as appropriate to every activity, in order
to identify areas of improvement. This measurement become the
basis of continuous improvement.
4. Cost of quality evaluation:
The company should understand the concept of cost of quality and
this should be communicated to the people and they should be
trained to identify and measure cost of quality, work to eliminate the
activities where cost of quality is more.
5. Quality awareness:
Crosby stated that the company should share with employees the
measurement of what non-quality is costing to the company. This
can be achieved by training supervisor to align employees and by
providing visible evidence of the concern for quality improvement
through communication. Quality awareness help in changing the
attitude of people towards quality and change.
6. Corrective action:
When people are encouraged to speak in a free environment, they
discuss their problem, which bring out opportunities for corrective
actions. The company should have a system, where worker can
discuss their problem with the supervisor and if they cannot handle
these should refer it to managers.
7. Zero defect programmes:
The company should initiate zero defect programmes where a small
adhoc team is constituted to explore and implement the principle of
doing thing right the first time. Its purpose it to show that zero
defect is a necessity for quality. This must be transmitted to every
member of the team.
8. Supervisor training:
The management should conduct a formal training for all level of
management prior to implementation of all the steps. All manager
must understand each step well enough to explain it to their
personnel. When every supervisor is able to understand the
programme he realise the value and its importance for the company.
9. Zero defect day:
The company should organise a zero defect day, where supervisors
communicate to people about the zero defect programme. The
employee should feel it as a special day that they can learn to
change their latitude towards the attitude for zero defect
programme.
10. Goal setting:
The supervisors should discuss with people what goal they would like
to achieve. The goal can be set for 30, 60 or 90 days.
11. Error cause removal:
Ask people what problem they face. To give error free work, record
these and find out the root cause of these problem and provide
solution for it. For this, a single page questionnaire can be used.
12. Recognition:
Recognition of people who had achieved their target or performed
exceptionally well is essential for establishing quality management
system. Recognition not only become the means of appreciation or
motivation, but it also communicate to the rest the success story of
the programme.
13. Quality councils:
Formation of a quality council, where teams of experts and
professional meet on a regular basis to discuss and share the
information about the program, reviewing problem to find out
solution and exchange of idea and fast solution finding, is the key
benefits.
14. Do it over again:
The company should keep on following the above mentioned step on
a regular basis. Since factor keep on changing with the passage of
time and fulfilling newer requirement, improvement should be done
continually.
The concept of cost of quality:
Crosby had classified the cost of quality under three heads, namely,
the prevention cost, appraisal cost and failure cost.
Prevention cost:
This is the cost the company incur in establishing and implementing
system to prevent any defect or failure in the product or services is
prevention cost.
Appraisal cost:
The resource consumed to establish and implement system to
conduct the inspection of product or services.
Failure cost:
The cost the company incurs due to failure of the product and
services.
Quality circle:
A quality circle is a volunteer group composed of employees or
worker or trainees who meet to talk about workplace improvement
and quality management in the organisation. They either share task
or responsibilities and maintain a consistent communication with
member by way of weekly meetings and make presentation to
management with their ideas, especially relating to quality of output,
in order to improve the performance of the organisation, and
motivate and enrich the work of employees.
The usual quality circle process:
1. Problem identification
2. Problem selection
3. Problem analysis
4. Come up with potential solution
5. Agree on the best solution
6. Create a potential implementation plan
7. Present the finding to the management and get the approval
for implementation
8. Implementation solution
The major challenges in sustaining the quality circles are:
1. Lack of understanding what quality circles may cause management
to be reluctant to initiate circle, act upon circle suggestion; or being
eager for quick solution, may implement these suggestion too early.
2. Lack of a clear purpose or direction. Without having a clear purpose,
it is difficult to be a productive team.
3. Lack of volunteers. Under circumstance like this, the employee at
time is reluctant to be part of the team and the team loses focus.
4. Lack of support from management and loss of interest in the project
that the circle is working on is also a hindrance for the success of the
circle.
5. Without empowerment and support of the management staff, circles
will not have the resources necessary to be successful.
Leadership policy external leadership and internal leadership:
The effective leader should have following traits, so as to make the TQM
approach successful.
 Effective leader should have a thorough understanding of the
importance of the TQM. Without realising the significance of TQM.
The leader will not be able to realise the need of TQM in the company
and will not provide the level of commitment required for it.
 Effective leaders should ensure that the TQM objective are rightly
highlighted in the company vision and mission. The leader should
understand that the company should communicate its quality policy
and goal to all the level of the organisation and also to the external
world so that it is known and clear to all what the company is striving
to achieve. Similarly, the strategic goal of the company should also be
clearly spelt out.
 Leader should understand the role of customer satisfaction in the
success of company, TQM is a customer centric process which works
to provide better level of satisfaction at all levels.
 The definition of customer include the internal, as well as the external,
customer, which include all the employees, supplier, distributors and
other stakeholder of the company. The leader should identify the level
of satisfaction required to be fulfil by the company.
 The leader should encourage the process of problem solving and in
case of any hindrances, allocate the required resource so that the
necessary improvement can be made.
 The leader foster the concept of customer satisfaction, where even the
department and processes are considered as customer so that the
quality is assured at every level of work.
 The leader promote 100% inspection, i.e., prevention of defect and
building a system where every employee take his responsibility in
building quality in the product or services.
 Should be a role model. His action should be in line with the
commitment made. He should reflect through his day to day working
the importance of quality and customer satisfaction to all.
 He should develop a system of empowerment so that team sprit can
be promoted among the employees, so that their morale can be high.
 The leader should keep focus on further improvement. He should be
proactive in nature to foresee change and modify the processes and
product to cater to the customers.
 The leader promotes and builds an atmosphere of learning and
training, and provides opportunities to employees to improve their
skills.
The leader implementing the TQM can be an internal or external
leader. An internal leader is a person who is from the existing pool of
employees, who has a reasonable amount of experience in the
company or the leader can be person brought by the management
from outside the company. In both the cases, the effectiveness of the
leader can only be judged by the action taken by him.
In contrast an external leader, as coming from outside the company
bring in newer ideas which can be beneficial for the organisation. Apart
 from it, external leader is taken more seriously by employees due to
newness.
Having an internal leader help in resolving the resistance for change as
he is known to everyone and thus can be taken as more empathetic,
whereas the external leader is considered as a threat by the employees.
Strategic Planning – Strategic Development Process, Company
Strategy:
Strategy can be defined as the process of setting long term target and
plan to achieve these. Strategic management help a company to analyse
the business environment and identify situation and means to convert
these to the advantages of the company. Strategic management provide
direction and scope to the company to meet the market needs and fulfil
expectation of the stakeholder and attain sustainable growth. Strategic
planning helps the company to know the reason for its existence, its
vision, where it want to be in the future, define its customer, product
and service and the approach to fulfil these target.
Strategic management seeks to forecast and predict situation for which
the company needs to conduct activities like forecasting, scenario
development, projections, etc., for the purpose of better decision making
and resource allocation. Strategic management provide the long term
vision for the company where it highlight its plans for various
approaches like mergers and acquisition, demergers and divestment,
etc.
Strategic planning also focuses on various parameter like quality, vendor
relation and industrial relation.
Step-1: The strategic planning begins with defining the vision, mission,
and value system for the company.
Step-2: Company conduct situation analysis to predict situation it is
going to face.
Step-3: Based on the analysis of the various situation the company
generate plans to convert these situation for us advantages.
Step-4: Implement the proposed plan by systematic execution.
Step-5: Monitor result and evaluate the result with the predicted result
so as to critically appraise the planning process, use the experience for
the planning for the next phase of planning.
By doing strategic planning function with the help of quality principle,
the advantages are:
 Every process is done in an orderly and systematic manner.
 Every step is documented and recorded for future use.
 The result desired are specific and measureable.
 The resource required and allocated are defined and arranged
for.
 Continuous monitoring of the process and recording of
outcomes help in tracking and modifying the plans to suit the
requirement.
 The documentation of each step acts as a proof of the activity
done and the outcome.
 The data collected acts as referenced for future planning and
help the company do better planning than before.
Customer and Market Integration:
The major objectives to integrate the customer and market with the
company processes are:
 To determine the market segment and target customer with
which the company want to do business.
 To know the need and expectation of the chosen market.
 To build system for listening to the voice of customer and
learning from them to determine key requirement of customer
and their future needs and institute internal processes to meet
requirement of the customer.
  To build and establish a customer satisfaction measurement
system and to take corrective action and improvement
measures, wherever required.
 To build and establish a system to take feedback from customer
for further improvement in the product or services or process of
the company.
 To establish a system of customer service to provide timely
service to the customer and respond to the customer
complaints.
Customer Satisfaction Enhancement:
Customer satisfaction enhancement is process by which the company
tries to find out:
 The changing expectation and perception of the customer.
 To record the view of customer for analysis of product
performance in the market and develop newer products.
 To find out alternative ways to enhance value for the
customers, while maintaining, or reducing costs.
 To identify potential customer of the customer of the
company’s product and services.
 To improve upon the service provided by the company, along
with the product, which are critical for the success of the
company.
 To improve the various processes to control variations in the
product and reduce defect.
The system for customer satisfaction enhancement can be
established by implementing various mechanisms like:
Customer Feedback: The Company should implement a system to
take feedback from the customer so that they analyse the
expectation of the customer and up to what level the company is
able to achieve these.
Customer Complaints: The Company can also use data of the
customer complaints for customer satisfaction enhancement. The
company should closely monitor, record and analysis the nature of
customer complaints and frequency so as to use this data for further
improvement, e.g., by using check sheets and pare to diagrams, the
company can know the different complaints received by the company
and their frequency. Customer complaints are signs of customer
dissatisfaction.
Six Sigma: Companies can also implement the concept of six sigma to
reduce the variability and reduce the defect in their product and
services, by reducing the variability and defect the company can
significantly improve the product performance and reliability which
reduce the event of guest dissatisfaction and enhance the customer
satisfaction.
Participation of Customer in Product Development: The Company
should have a system like the concurrent engineering or house of
quality, etc., so that when a company is planning to modify or
develop newer product, it can collect the view of customer so that it
can develop those product and features which will generate more
satisfaction for the customer.
Customer Relations: The Company should have a mechanism to build
and maintain customer relations. For this, the company should have
CRM customer relationship management system to collect the data
about the customer and maintain good relation with the customer.
By establishing the customer relationship management system, the
company can not only be able to track the frequencies of customer
purchase, it can also record the customer preferences.
Process Management:
Process management or business process management is an
organisational discipline. It provide tools and resources for analysing,
defining, optimizing, monitoring, and controlling business process
and for measuring and driving improved performance of
interdependent business process. It is a combination of people,
policies and technology.
Management of product process, service process and support
process:
TQM is a process based philosophy according to which, every activity
carried out in the organisation is a process and management of these
process is necessary to achieve the goal of quality management in
the company. Each activity carried out in an organisation is value
creation activity and also adding cost. Therefore, implement the TQM
philosophy, the company must identify the key value creation
processes, which are most important for running the business and
maintaining or achieving a sustainable competitive advantage by
generating a specific level of customer satisfaction.
These are the process that involve the majority of an organisation
employees and produce customer, stakeholder value and add cost.
These also include the business processes most critical to adding
value to the business itself, resulting in success and growth. Key value
creation processes differ greatly among organisation, depending on
many factor.
Supplier partnering process:
Supplier partnering is a concept to improve the input of the processes
where the organisation develop and treat the supplier as their
partner and a stakeholder, company provides training and
development of the supplier so that they can ensure desired quality
in the input, by supplier partnering not only the quality of the product
improves, it also give growth to supplier and lower cost of operation
of the company.
The different processes of the company are value creation and cost
adding activities. The chain of value creation activity begin from the
procurement of the raw material and continues till the final disposal
of the product.
Secondly the value creation is enhanced if the supplies are of better
quality and reaches the company in time so that there is no shortage
of supplier effecting the normal functioning of the company. Here the
company should establish an extended relationship between buyer
and seller, based on confidence, credibility and mutual benefit.
Supply partnering benefits to organisation:
 Consistent supply of raw material
 Reduced inventory carrying cost
 Competitive advantage by maintaining exclusively for a
particular supplier.
 Import desired quality standard
 Reduce the number of employees
Supply partnering benefits to suppliers:
 Suppliers are able to execute consistent orders, which would
provide stability them.
 Being partner of the company, their competition with other
supplier for the order is almost reduced.
 They settlement of the bills or payment are secured and the
processing times is also reduced considerably.
 The company provides training to the supplier so that they can
bring efficiencies and quality in their process leading to better
margins.
Supply partnering can be managed by:
1. Establishment of common goal and desired outcome
2. Conduct joint meeting for planning, executing and resolving
activities.
3. Set procedure for conflict resolution.
 4. Create checklist to identify when the relationship is
deteriorating.
5. Conduct regular team building sessions.
6. Confidentially agreement.
Importance of supplier partnering in TQM:
The major objective of TQM approach is to improve upon value
creation and enhance the customer satisfaction in a consistent
manner. To achieve these objective one very important and critical
factor is the inputs. So partnering with the supplier who are very
significant stakeholder and customer of the company can help in
following manner.
The partnering with supplier provides the three major benefit
consistency in quality and reduction of variability of the input,
lowering of cost of operation leading to enhancing value creation,
and finally continuous improvement of both the company and
supplier.
Managing Change:
“Change is the permanent feature of life”
Implementation of TQM require change in the organisation. These
changes are related to the management, organisation structure,
culture and the way we do things in the organisation. The change
may face a degree of resistance from the employees in the
organisation. The company may face a degree of resistance from the
employees who doesn’t want to change.
Reasons for resistance to change:
 Change in habit
 Security
 Economic factor
 Fear of the unknown
  Selective information processing
 Limited focus to change
 Group inertia
Role of communication:
When the company is trying to bring in change required for
establishing TQM philosophy or a QMS, the best method to make the
change successful is to communicate the company should
communication:
 The reason and necessity of change required for implementing
the TQM, or QMS.
 The benefit for the employees through these changes
 The role of the organisation, department and employee in the
process of change
 What will be the impact of maintaining the status quo and
transformation on them
 Creating awareness in the organisation and evaluating the
scenario for the change process.
Participation: The Company should seek active participation from all
the employees, group and department as they are the one who will
be working on it and be affected by it. So the company should discuss
and take opinion from the employees at each stage of decision
making. Employees can gives the best idea for bringing in the change
for betterment and improvement in the current system of the
organisation.
Feedback: If the company establish a mechanism to collect and
analyse the feedback given by the employees, the transformation
process will be very smooth and effective. When the company gather
feedback it come to know about various aspect of the change process
like the problem faced by the employees, the resource requirement
the experiences and success stories of employees in transformation.
Support: the company should provide necessary support like
additional resource, training, counselling etc., so that the employee is
able to accommodate himself to the transformation. Sometimes the
company also gives incentives to employees to motivate them to
change for betterment.
Empathy: the company should reflect an empathetic behaviour
towards the employees and try to evaluate how the employee feel
about the change. Then, the company should communicate and try
to evaluate method to ease out the resistance by discussion and
participation.
Human Resource Development and Management:
Human resource is one of the most important and most dynamic
factor in the operation of organisation. The employees are the major
stakeholder of the company who provide the skill; knowledge and
innovation thinking, with their efficient and effective working
organisation are able to achieve their noble objective. Hence the
organisation should have an effective process of Human resource
development and management. The key factor in this regard are
aligning the people with the process and recognising people as the
key stakeholder in the success of TQM, provide sufficient opportunity
for training and development and empowering them with sufficient
authority and power to take decision so that they contribute
effectively in the organisation success.
The role of human resource in implementing the TQM is very
important as it is the employees who are actually planning,
implementing the different concept of quality management in their
normal operation. The TQM philosophy is a people centric philosophy
wherein all quality related activities like the continuous improvement
system in either a manufacturing or a service environment is
managed by the people.
Human resource development and management is commonly
practiced as a part of the overall organisational quality planning, and
implicitly intended for internal customer satisfaction, across
organisational team working, training and career development and
quality of working life.
Human resource development and management is a process to
provide the right kind of person at the right place, every time at all
level of organisation. The basic objective of HR management and
development are to plan target for HR department and to align the
functioning in line with the company strategy.
Work System:
Integration of infrastructure, technologies, information, and personal
working together on work station to fulfil the task is known as work
system. Each work system perform a certain work and the output of
one work system can become the input of the next work system.
The various functions performed in the company like production,
maintenance, sales and marketing are all example of work system,
and the output of each work system is delivered to a customer
(internal or external).
Work system improvement are required for the following reasons:
 Improvement of a quality of work life
 Improve job satisfaction
 Improvement of productivity & increased organisational
efficiency.
 Improved value creation, by reduction in manufacturing cost.
 Improved work place layout
 Smooth work flow
 Reduction in defeat and defectives
 Better planning of the production facility
 Improved capacity planning and utilisation
  Reduced material handling cost
 Basis of effective incentive scheme
 Reduction in customer complaints and overall improvement in
customer satisfaction
Work Study:
It is a systematic technique to find out the most effective method of
performing a necessary operation or function. The effectiveness can
be measured in term of increasing productivity, improving job
satisfaction, reducing fatigue, decrease in the number of accidents
and personal injury, reduction of wastage, reduction in breakage of
machinery, tool and equipment, improved performance timing.
Method Study:
The basic objective for conducting method study is to:
 Study the existing method of doing a job, operation or activity.
 Develop an improved method of doing a job, to improve
productivity and reduce operating cost.
 Optimise resource utilisation and to eliminate wastage.
 Reduce and eliminate wasteful and inefficient activities.
 Standard method of processes, working conditions, machinery,
equipment and tools.
Motion Study:
A systematic processes to analyse the different movement completed
to perform a job. It is a technique for identifying and removing
unnecessary, inefficient and ill directed motion or movement. The
basic objective of motion study is to find out and apply a plan of
doing work where there is least requirement of labour which saves
time and energy of the worker with improvement in performance.
Work Measurement:
This is a technique to recording the content and timing of the various
step that have to be performed to complete a task. The basic
objective of work measurement is to find, define the content and
time structure of the various step that have to be performed to
complete a task at the desired level of performance by a qualified
worker.
Work measurement is done to achieve the following objective:
 To improve the overall planning and controlling effort in the
facilities.
 Efficiency in manpower planning and establishing a sound
system of duty rosters.
 To benchmark labour performance.
 To control the wastage of resource and idling of plants.
 To improve efficiency and capacity of various work system.
 To enhance performance appraisal system of the workers.
Time Study:
The time study is a work measurement technique for recording the
times and rate of working for the element of a specified job carried
out under specified condition and for analysing the data so as to
obtain the time necessary for carrying out the job at a defined level
of performance.
Time study help establishing the standard time of operation in work
system and can be used for calculation of cycle time and reduce it to
increase the productivity without effecting the quality. Time study
also help in selecting an alternative method of doing the work more
efficiently and effectively.
Training, Education and Development:
The need of training, education and development is very significant
for TQM philosophy. The need was realised as early as 1960 with the
introduction of quality circles, and become the part of quality
management system. For implementation of TQM, the company
should have a system for identifying training need of every employee,
conducting training programmes for development and
empowerment.
The training and education is not only confined to technical or
statistical training. The employees have to be trained in the following
skills.
 Communication: the TQM requires free communication
channel. The employees should know the ways of effective
communication so that there is hardly any chance of
miscommunication or communication gap.
 Team building: the TQM requires a team based working
environment where all the employees strives to achieve a
common objective by complementing each other in a
synergistic system, so all employees should be given team
building training so that they can understand the concept of
team, working styles, the objective of teams etc.
 Motivation: a highly motivated employees is an asset for the
organisation and TQM, a motivated employee not only gives
100% commitment but also reflect a positive attitude so that
company should provide them training to remain motivated.
 Presentation skills: the employees should have good
presentation skill as in TQM the employees have a negotiate for
resource and to present their suggestion to the management so
even if the idea are worthwhile and if not presented in
appropriate manner they will not be approved. So presentation
skill help in expressing ideas well.
  Problem solving and decision making: the employees under
TQM are encouraged and empowered to take the decision for
their work and solve problems. So there is a requirement to
train the employees in technique like problem identification,
solving and decision making skills, as these management skill
help the employees in performing their role in a more effective
manner.
Employee well-being and satisfaction:
Under TQM, the employees is an internal customer of the
organisation. Hence the company should have different mechanism
to deliver satisfaction by taking care of their well-being and
satisfaction. With so many methods like better organisation culture,
cleaner and conducive work environment etc., organisation can
deliver high level of job satisfaction to their employees.
The implementation and success of TQM is dependent on the
performance of the employee and they are also the stakeholder and
internal customer of the company so their well-being and satisfaction
has to be ensured. For this purpose, the companies need to establish
a system for the well-being and satisfaction for their employees.
Employee’s well-being and satisfaction can be enhanced by
maintaining a conducive work environment and an efficient system
of employee support.
Measurement and continuous improvement:
The sampling in quality management seek to find out the
probabilities of defect, or variability in the process. The sampling also
help in defining the chances of acceptance or rejection of a lot by the
customer. Sampling is also required for conducting statistical process
control, where we gather data from the process to make different
type of chart for attributes and variables of the process for analysis.
There can be two sampling plans, probability and non-probability. In
case of probability sampling plan:
 Each element in the population has a known and equal
probability of selection.
 Each possible sample of a given size (n) has a known and equal
probability of being the sample actually selected. This implies
that every element is selected independently of every other
element.
On the other hand in non-probability sampling plan, the probability
of each element in the population is not having known and has
probability of being selected in the sample. The different method of
sampling which can be used for quality management random
sampling, systematic random sampling, stratified random sampling,
cluster sampling, etc. the non-probability sampling method can be
quota sampling, snow ball, judgemental sampling, convenience
sampling.
Acceptance sampling is the technique followed by a company to take
a decision whether to accept a lot which is coming out from a process
or not. Based on the analysis of drawn sample, we can figure out
what will be the overall quality of the total lot. Acceptance sampling
can be done for the incoming goods or input to check for consistency
and quality.
Acceptance quality level is the basis line requirement for the quality
of the producer’s product. In other words, acceptance quality level is
an inspection standard describing the maximum number of defect
that could be considered acceptable during the random sampling of
an inspection.
The defect found during inspection are sometime classified into three
level: critical, major and minor. Critical defect are those that render
the product unsafe or hazardous for the end user or that which
contravenes mandatory regulation. Major defect can result in the
product failure, reducing its marketability, usability or saleability.
Lastly, minor defect do not affect the product marketability or
usability, but represent workmanship defect that make the product
fall short of defined quality standard.
Basic tools of quality:
1. Check sheets:
 Used to collect and compile data.
 Help in organizing data by category.
 Depict the frequency and type of any occurrence like defect or
observation.
 50 or more observation should be available.
 Used by operation while working on job itself.
 Sign are used for recording the happening of an event.
2. Histogram:
 Display the frequency of occurrence of an event or
characteristics of data from a process.
 2-D presentation.
 Used as a mean of displaying data with variable nature,
distribution pattern of the data.
 Help in distinguishing common causes or special causes in the
process.
 Commonly used to present quality improvement data.
 Used for small amount of data that vary considerably.
3. Pareto Diagrams:
 Bar graph based on the principle of Wilfredo Pareto: 80-20 rule.
 A Pareto diagram put data in a hierarchical order that display
the relative frequency of various categories of problem or
events.
 Bar are arranged in the descending order of magnitude from
left to right.
 Representing data in this manner help in selecting the vital few
from trivial many.
 Used primarily to identify and evaluate non-conformities.
4. Cause and effect Diagram:
 Also called as fish bone diagram.
 Graphical representation of cause and effect of the different
event resulting in a major event or problem.
 The undesirable outcome is shown as effect and related cause
are shown as leading to or potentially leading to the said effect.
 Limitation: users can overlook important complex interaction
between causes.
5. Scatter Diagrams:
 Used to represent two set of data point having some relation.
 Larger the number of data points, the better will be the
interpretation, to fit the data points.
 Used for regression analysis.
 To know whether there is a relationship among two variable of
not.
6. Flow chart or flow diagrams:
 Pictorial or graphic representation of processes in a stepwise or
sequential manner.
 Provide understanding of the total process.
 Help to find out what to measure to control the overall process
or bring efficiency in the overall system.
7. Control charts:
 Method of plotting the data collected from the process to find
out whether the process is in statistical control or not.
 Control chart can be made for variable or attitude data.
 Used to analyse the data and find out whether the observation
are under the control limits.
 Help in identifying the causes of variation and find out the
solution.
Advanced tool of quality:
1. Affinity Diagram:
 Tool to organise many idea or view to discover meaningful
group based on some relevant relationship.
 Used to refine a brainstorming into something that make sense
and can be dealt with more easily.
2. Relation Diagram:
 Find out cause and effect relationship between the different
ideas or component.
 Help in analysing the link between different aspects of a
complex situation.
 Made after the affinity diagram to ascertain what component
of the brainstorming are cause and the effect of these cause.
 Used where analysis of relation is important problem is of
complex nature, the solution required have great impact on a
system or organisation and understanding how different aspect
of the problem are connected.
3. Tree diagram:
 Very simple to use and logical.
 Used in many analysis situation.
 The tree diagram break down a complex or a bigger problem
into smaller actionable factors.
 In tree diagram, the problem or situation is broken down into
smaller fragments and these parts are represented into
hierarchical manner, which represent a structure similar to a
tree.
 In this representation, each level of the tree shows the relation
of each factor to the ultimate problem and its level of
significance.
4. Matrix diagram:
 It represent the relationship between characteristics, function
and task in a way to establish logical connection between the
factors under consideration.
 Used when we have two list to understand the many to many
relationship between them.
 Useful to determine the strength of the relationship between
either single pairs of item, or a single item and another
complete list.
5. Arrow diagram:
 Used for effective planning.
 Used to depict the different task or activities which must be
undertaken for completion of a project.
 The arrow diagram shows:
 The required order of task in a project or process.
 The timing of each task.
 The best schedule for the entire project.
 Potential scheduling and resource problem and their
solution.
 Used to calculate the “critical path” of the project.
6. Process decision program charts:
 Used to create a detailed plan of implementation including all
the stage of activities, along with possible problem or
unfavourable events which may happen and the counter
measures which can be used for them.
 Under this the planner can use three different strategies:
1. One is the risk avoidance, which means not taking an action
that will result in an identified data.
2. Second is the risk reduction which means taking some action
that will reduce but not eliminate the identified risk.
3. Finally the contingency planning does not reduce the chance of
the identified risk occurring.
 7. Matrix data analysis:
 Tool for comparing a large set of factor or variables, which are
related to each other.
 Based on finding out group of item that behave in similar
manner.
 The matrix Data Analysis Chart help to classify items by
identifying two major characteristic common to all item and
then plotting each item as a point on a standard x-y chart.
 Chart depicts how the individual item relate both to the
characteristics and to one another.
Quality Function Deployment:
QFD is a method for developing a design quality aimed at satisfying
the consumer and then translating the consumers demand into
design target and major quality assurance point to be used
throughout the production phase. QFD is a way to assure the design
quality while the product is still in the design stage.
The major objective of QFD is to translate subjective quality criteria
into objective design specification which can be quantified and
measured and used to design and manufacture the product that
delight customer and fulfil unarticulated desires as well. QFD provide
a system of comprehensive development process for:
 Identifying and understanding true customer need from the
customer perspective.
 Knowing the customer perception towards value.
 Understanding how customer, or end user, become interested,
choose, and are satisfied.
 Analysing how do we know the need of the customer.
 To decide what technical features to include in the offering.
 Determining the level of performance to deliver.
 Intelligently linking the need of the customer with design,
development, engineering, manufacturing and service function.
  Can also be used for intelligently linked design for six sigma
with the front end voice of customer analysis and the entire
design system.
House of Quality:
 House of quality is defined as a product planning matrix that is
built to show how customer requirement relate directly to the
way and method companies can use to achieve those
requirement.
 Primary tool used during quality function development to help
decision making.
 Rely heavily on identifying and maintaining the voice of the
customer.
Steps of Product Planning in QFD:
1. Customer requirement voice of the customer.
2. Make a list of technical requirement.
3. Take important customer rating.
4. Take customer rating of the competitors.
5. Convert it into technical descriptors or the voice of engineers.
6. Direction of improvement.
7. Create a relationship matrix between voice of customer and
voice of engineer.
8. Organisational difficulty.
9. Do a technical analysis of a competitor’s product.
10. Decide target value for technical descriptors.
11. Make a correlation matrix.
12. Decide the absolute importance.
Concurrent Engineering:
Concurrent Engineering is a systematic and integrated strategy of
product development for faster market response with correct quality
and value. Concurrent engineering tries to achieve integration of all
activities that contribute to design development production and
marketing of product or service.
Basic objective of concurrent engineering:
 Reduce the lead time for new product development.
 Maintain competitive edge by efficient and effective product
development.
 Optimum utilisation of resource in product development.
 Improvement in the quality of product.
 Improves the knowledge and skill of the employees.
 Integration of different department and encourage team spirit
in the organisation.
 Overall, improvement of company performance and
enhancement of wealth creation by company for its
stakeholder.
Step of concurrent engineering:
1. Formation of cross functional teams having participants from
concerned department, like the engineering, sales etc.
2. Initiating design process to form basic design.
3. Brainstorming and discussion for final design and approval from
top management.
4. Developing production plan and schedule for the planned
product. Developing quality target and cost structure.
5. Establishing support processes, vendors, MIS etc. for the new
product.
6. Analysing risk and probable hindrances.
7. Pilot production and foreseeing any problem, if found removal
of such problem for full scale production and sale of product.
Kaizen:
 Tool for continuous improvement.
  Small improvement, over a period of time will result in
substantial improvement in organisation performance.
 The cumulative effect of the small change will completely
change the organisation for betterment.
 Kaizen is a people centric approach and required extensive
study of the organisation before implementation.
The primary element of kaizen are as follow:
 Team work
 Personal discipline
 Improved morale
 Suggestions for improvement
 Quality circle
The kaizen system flow chart can be represented as follows:
1. Analysis the current system and standard, identify the
weakness and area of improvement
2. Plan for kaizen by identifying area and means of improvement
3. Formation of kaizen team, focus of 5 S system, training of staff
4. Implementation improvement task, review result
5. Set new standard and new standard operation procedure
6. Look for new opportunity and plan for further improvement
Design of Experiment (DOE):
In DOE, three things of the process and analyzed. These include
factor or variable or input to the process, second aspect is the level or
setting of each factor. A level represent the degree to which the
factor will be present its presence in the total process. The final
aspect is the output of the experiment, known as response. It is the
end result of the total process. We can find out best, or suitable
alternative for our processes, by comparing and recording the result
from various alternative.
Fault Tree Analysis:
Fault tree analysis is a graphical technical used to determine in
advance the list of undesired event that design team must take care
of to avoid any failure which can result in an undesirable outcome.
The specified undesirable outcome is referred to as a top event where
the deductive analysis about the general conclusion and their causes
is often described as a top down approach. The fault tree diagram
attempt to interlink the probable cause of failure of an event through
the representation of branches of a tree.
Value Engineering:
Value engineering is systematic process of improving or maintaining
the quality and consistency of a product or service at the lower cost.
The basic objective of value engineering is improve value and lower
cost; the two factor which are perceived to be directly related i.e.,
improving value require increased cost. Value engineering is a
process to identify and eliminate unnecessary cost which provide
neither use, nor life, nor quality, nor appearance, nor customer
feature without compromising on the value of the product or service.
Six Sigma:
Six sigma is a TQM concept which is used to de crease the number of
defect per million opportunity. Six sigma tries to reduce the process
output variation by ensuring that the process is made capable such
that the specification tolerance least 12 times sigma. Higher the
sigma level, better will be the quality.
Just in time:
Just in time means only what is needed, when it is needed and in the
amount needed. The concept of just in time was invented by Kiichiro
Toyoda, but it was Ohno who developed it to the full potential. JIT
approach has originated from the Toyota Production system and it
means supplying to each process what is needed at the time that it is
needed and in the quantity it is needed. JIT is implemented with the
help of Kanban, the system to use visual signal to control the
movement of material between the different process and work
centre, Kanban is also used for initiating production of new material
to replenish those sent downstream to the next work centre.
Capability Maturity Model:
Capability maturity model is used to assess the maturity of software
developing process of the organisation, which is now being also tried
in other area of industry the CMM is being developed be software
engineering institution of Carnegie Mellon University, USA. This
model is actually based on the management maturity grid model of
Philips B Crosby. Capability maturity model integration is a process
improvement approach that provide organisation with the essential
element of effective process it is the advanced approach to CMM.
The objective of CMMI is to improve the use of maturity model for
software engineering and other discipline integration of many
different model into one frame work create by SEI who also
developed the CMM model.
ISO 9000 – 2000:
ISO 9000:2000 refers to ISO 9000 update which was released in 2000.
ISO 9000 is defined as a set of international standard of quality
management and quality assurance developed to help companies
effectively document the quality system element needed to maintain
an efficient quality system.
There are certain attributes/goals of ISO 9000:2000:
1. It should meet the stakeholders need
2. It can be useable by all size of organisation
3. It can be useable by all sectors
4. It has to be simple and clearly understood
 5. It should try to connect quality management system to business
process
ISO was established in 1947 to promote standard in international
trade, communication and manufacturing it is non-governmental
organisation without authority to improve its standard. The head
office is based in General Switzerland. ISO is an independent body
and help the organisation to implement and manage quality
management system, ISO acts as a third party certifying organisation
to recognise the QMS of an organisation. After detailed process and
following different stages, an organisation can get a certification for
process or product. ISO had defined various guideline for
implementation of the ISO.
ISO 9000 Principles of Quality Management:
 Customer focus
 Leadership
 Engagement of people
 Process approach
 Improvement in quality
 Evidence based decision making
 Relationship management
ISO 9000-2000 Benefits:
 Increased marketability
 Reduced operational expenses
 Better management control
 Increased customer satisfaction
 Improved internal communication
 Improve customer service
 Reduction of product liability risks
 Attractiveness to investors
The new ISO 9001:2008:
ISO 9001:2008 system focus on prevention on quality of product
realisation and on improvement of customer satisfaction. The ISO
9001:2008 provide framework to customise the quality management
system of the organisation. This customisation approach gives
freedom to the organisation to develop, to manage and improve its
process and choose the right tools and methodologies to
demonstrate the effective implementation for the achievement of
quality goals.
The universality and versatility of the ISO 9001:2008 standard is
based on the process management model and the five element
structure which are:
 Quality Management System
 Management responsibility
 Resources Management
 Product realisation
 Measurement, analysis and improvement
Malcolm Baldrige Examination:
The Malcolm Baldrige National Quality Award is the highest level of
national recognition for performance excellence that U.S.
organisation can receive. The Award focuses on performance in six
key areas: product and service outcome, customer focused outcome,
financial and market outcome, workforce-focused outcome, process
effectiveness outcome and leadership outcome.
To receive the Baldrige Award an organisation must have:
 A role model organisational management system that ensure
continuous improvement in the delivery of product and/or
services, demonstrate efficient and effective operation.
 Provide a way of engaging and responding to customer and
other stakeholders.
The Baldrige examination evaluate the company on the following
criteria, known as criterion of performance excellence Leadership
(12%), Strategic Planning (8.5%), Customer and Market focus (8.5%),
Information and Analysis (9%), Human Resource Focus (8.5%),
Process Management (8.5%) and Business Results(45%).
Re-engineering and Landmarks:
Re-engineering is a process of redesigning business processes,
associated system and organisational structure to achieve a dramatic
improvement in business performance.
Re-engineering entrails fundamental rethinking and radical redesign
of business process to bring about dramatic improvement in
performance.
Re-engineering process tries to formulate solution which can make
the company:
 More customer focused
 Future oriented, so that it can achieve sustainable growth
 Capitalised on best practices and learning from the best in the
market
 Help in improving the bottom line growth in case the company
is under down trend or facing a crises
When a company is considering re-engineering. It tries to change the
following components of the business:
 Strategy
 Process
 Culture
 Technology
 Organisation
The basic objective of re-engineering is to improve process by finding
out newer ways of doing things in the organisation and it not always
require decision like downsizing, restructuring, reorganisation,
automation, new technology, which can cause any adverse effect to
any of the stakeholder like shareholder, employees and customer,
etc. it tries bring more benefit to the stakeholder of the organisation.
Process of Re-engineering:
1. Realisation stage
2. Establish vision and mission with specific process objective to be
achieved by the Re-engineering process
3. Identification of all the process which can be considered for re-
engineering
4. Evaluation of existing processes
5. Technology consideration
6. Testing a prototype of reengineering
Benchmarking:
Benchmarking is a term coined Robert C Camp in 1980. It is a process
of finding and implementing the best practices of a company which
made it successful in the industry.
Benchmarking involves understanding of what, why, and how of a
superior process or method and then adopting it in the organisation
for raising performance to a higher level.
Benchmarking is a method to learn things from a successful
company, it involves analysing the process, product, or services of a
world class company in order to understand how it achieved superior
result and then follow internal measures to meet and surpass these.
Steps of Benchmarking:
1. Plan: identify the area where the benchmarking is to be
applied. It involves finding out critical factor for success,
formation of benchmarking team, document the current
practices and processes, set performance measures.
 2. Search: identify the appropriate benchmarking partner and
study their best practices.
3. Observe: observe the processes of the organisation, understand
and document partner’s process, procedures and practices.
4. Analyze: analyze practices of the partner and self and find out
gap between what is our practices and what the partner does,
and find out root causes and measures which can be
implemented to fill these gaps.
5. Adopt: choose a suitable practice as best practice and adopt to
companies own operation.
Types of Benchmarking:
1. Strategic Benchmarking is where business need to improve
overall performance by examining the long term strategies and
general approaches that have enabled high-performers to
succeed.
2. Performance or Competitive Benchmarking is where
businesses consider their position in relation to performance
characteristics of key product and services.
3. Process Benchmarking focuses on improving specific critical
processes and operation. Process benchmarking invariably
involves producing process maps to facilitate comparison and
analysis.
4. Functional Benchmarking is businesses look to benchmark with
partner drawn from different business sector or area of activity,
to find ways of improving similar functions or work processes.
5. Internal Benchmarking is a benchmarking business or
operation from within the same organisation (e.g., business
unit in different countries). The main advantages of internal
benchmarking are that access to sensitive data and information
is easier.
6. External Benchmarking involves analysing outside organisation
that are known to be best in the field. External benchmarking
 provide opportunity of learning from those who are at the
leading edge.
7. International Benchmarking is the best practitioners are
identified and analysed elsewhere in the world, perhaps
because there are too benchmarking partners within the same
country to produce valid result.
Benefit of Benchmarking:
 Improvement in process and product output by adoption of new
practices learned from the benchmarked partner.
 Improvement in employee skill set through acquaintance with
diverse and innovation approaches and processes.
 Increased competitiveness as the company not only want to
learn and adopt the new concept, but also to outperform the
benchmarked partner.
 Increased employee satisfaction as the employees work in a
team for the total process, get appreciation and skill set are
enhanced.
 The company’s overall performance is improved a lot as it
continuously follow the benchmarking partner.